[China-Venezuela Joint Fund] ZTE and Venezuela's Movilnet establish joint venture for cell phone factory in Falcon state for 19.5 million USD [Linked to #35985]
Summary
Funding agency [Type]
China Development Bank (CDB) [State-owned Policy Bank]
Recipient
Venezuela
Sector
Communications (Code: 220)
Flow type
Loan
Level of public liability
Other public sector debt
Infrastructure
Yes
Category
Project lifecycle
Geography
Description
In February 2009, Hugo Chavez and Chinese Vice-president Xi Jinping signed an agreement for the construction of a cellphone factory. For the construction, China’s ZTE and Venezuela’s Movilnet established a joint venture called VTELCA of which China holds a 15% stake. This project received 19.5 million USD of funding from the Fondo Pesado (China-Venezuela Joint Financing Fund). Unclear how much comes from China exactly. In 2009, Chavez publicized the ZTE C366 “el Vergatario”, which was produced to show the technological capacity of the plant. Starting in 2010, Chavez pledged to produce a million phones per year in addition to battery chargers and batteries. In September of 2013, Vtelca produced the Android Vergatario, the third model with the android operating system of which it produces 4,000 units a day. China-Venezuela Joint Fund is party financed by China Development Bank. The total transaction amount of the project is $19.5 million but we don't know exactly how much is provided by China. The China-Venezuela Joint Fund receives contributions from China Development Bank and FONDEN, and it is administered by BANDES. See project ID#58677 for more information on the fund. Additionally, decause this project was supported, at least in part, by the China-Venezuela Joint Fund/Fondo Estrategico Pesado (See #35985, #37528, #37838, #38163, 38316, and #38380), this project is marked as a resource-backed or commodity-backed loan.
Number of official sources
4
Number of total sources
9
Details
Cofinanced
No
Direct receiving agencies [Type]
Banco de Desarrollo Económico y Social de Venezuela (BANDES) [State-owned Bank]
Implementing agencies [Type]
Zhongxing Technologies Energy (ZTE-e) [State-owned Company]
China-Venezuela Joint Fund [State-owned Fund]
Collateral provider [Type]
Pétroleos de Venezuela S.A. (PDVSA) [State-owned Company]
Collateral
Venezuela undertakes through PDVSA to sell fuel and / or crude oil in accordance with the oil contract (s) to ChinaOil in quantities not less than 230,000 barrels per day, by the date on that the obligations assumed with respect to the facilities have been completed and unconditionally fulfilled by BANDES; ChinaOil will deposit the money for the purchase of crude oil and fuel directly into the collection account opened and maintained by the BANDES and CDB.